Wage Garnishment — A Misunderstood Debt Collection Practice

Ohio residents who are in serious debt and are dealing with debt collectors may have heard their creditors threaten to garnish their wages in order to obtain the money owed them. The truth is, wage garnishment is not a debt collection practice a creditor can use whenever the creditor feels like it. There is a process they have to go through to get approval to take money straight out of one’s paycheck.

When a debt collector threatens to garnish one’s wages, do not fret just yet. It is not something that the creditor can get approval to do overnight. Court approval is needed to do it. Debtors are to be informed of any court proceedings so they have the opportunity to present their side of the case to a judge. So, if one receives a notice of a court date, do not miss it.

If a creditor receives approval to garnish one’s wages, this does not mean the creditor can take the full amount of one’s paycheck until the debt is paid off. The Consumer Credit Production Act has set limits on how much can be taken out of a paycheck to pay off debt. The max limit applies regardless of how many creditors are seeking to garnish one’s wages.

Ohio residents whose creditors are taking action to garnish their wages can stop creditors in their tracks. A bankruptcy filing can stop this debt collection practice. If a bankruptcy filing is ultimately approved, qualifying debts may be discharged or an affordable repayment plan can be created, subject to court approval, based on one’s current income level. An experienced bankruptcy attorney can provide more information about this topic and help one determine if filing for bankruptcy is the best option.